Financial Update (Second Quarter 2008)

Fed Program to Assist Minority, Young Banks

Partnership for Progress, an outreach program recently launched by the Federal Reserve System, is designed to help minority-owned and de novo financial institutions (those less than five years old) confront their unique challenges, cultivate safe and sound practices, and compete more effectively.

The program focuses on three stages of a bank's life cycle: "Start a Bank," "Manage Transition," and "Grow Shareholder Value." Topics covered by the program include credit and interest rate risk, capital and liquidity, and banking regulations. The program offers one-on-one guidance, workshops, and an extensive interactive Web-based resource and information center, including online courses to ensure broad access.

Maintaining banks' "vital role"
"The program's overarching mission is to preserve and promote minority-owned institutions and to enhance their vital role in providing access to credit and financial services in communities that have been historically underserved," said Fed Chairman Ben Bernanke. "The Federal Reserve is committed to helping minority-owned and de novo banks achieve long-term success."

Range of stakeholders supplied input
In developing Partnership for Progress, Federal Reserve officials met with minority-owned and de novo banks across the country as well as trade groups, bank consultants, and state and federal banking agencies to better understand the challenges these institutions face in raising capital, expanding, and attracting talent.

The Federal Reserve Bank of Philadelphia led the development of the program. Key concepts from the program will be incorporated into the Federal Reserve System's bank examiner training to deepen understanding of the issues unique to minority-owned institutions.